Justia California Court of Appeals Opinion Summaries

A woman named Lisa was under a conservatorship due to being gravely disabled from a mental disorder. Her father, Scott, was appointed as her conservator and placed her in a skilled nursing facility. Scott signed two optional arbitration agreements with the facility on Lisa's behalf. After Lisa died, her parents sued the facility's owners and operators, alleging various claims including wrongful death. The defendants sought to compel arbitration based on the agreements Scott signed.The Superior Court of Los Angeles County denied the petition to compel arbitration. The court found no evidence that Scott had the authority to bind Lisa to the arbitration agreements for the successor claims. Additionally, the court found that neither Scott nor Lisa's mother, Marilyn, signed the agreements in their individual capacities, thus the wrongful death claim was not subject to arbitration.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that the conservatorship order did not give Scott the authority to sign the arbitration agreements on Lisa's behalf. The court reasoned that the conservatorship order did not explicitly or implicitly authorize Scott to waive Lisa's right to a jury trial. Furthermore, the court found that the wrongful death claim was not subject to arbitration because Scott did not sign the agreements in his individual capacity, and Marilyn did not sign them at all. The court affirmed the lower court's decision, denying the petition to compel arbitration. View "Enmark v. KC Community Care" on Justia Law

A former employee, Campbell, filed a putative class action lawsuit against her employer, Sunshine Behavioral Health, LLC, alleging wage and hour violations. Campbell claimed that employees were not paid proper overtime, were required to work through meal and rest breaks without compensation, were not paid minimum wage, and were not paid in a timely manner. Sunshine initially proceeded with litigation and agreed to participate in mediation. However, Sunshine later claimed to have discovered an arbitration agreement signed by Campbell, which included a class action waiver.The Superior Court of Orange County found that Sunshine had waived its right to compel arbitration. Despite allegedly discovering the arbitration agreement in November 2022, Sunshine continued to engage in mediation discussions and did not inform Campbell or the court of its intent to compel arbitration until March 2023. Sunshine's delay and conduct were deemed inconsistent with an intent to arbitrate, leading the court to conclude that Sunshine had waived its right to arbitration.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and affirmed the lower court's decision. The appellate court found clear and convincing evidence that Sunshine had waived its right to arbitration. The court noted that Sunshine's actions, including agreeing to mediation on a class-wide basis and delaying the motion to compel arbitration, were inconsistent with an intent to arbitrate. The court emphasized that Sunshine's conduct demonstrated an intentional abandonment of the right to arbitrate, thus affirming the order denying the motion to compel arbitration. View "Campbell v. Sunshine Behavioral Health" on Justia Law

Petitioners purchased a new 2020 Ford Super Duty F-250 from Fairway Ford in San Bernardino, financing the purchase through the dealer and signing a sale contract that included an arbitration provision. The truck developed mechanical issues during the warranty period, and after unsuccessful repair attempts by Ford of Ventura, the petitioners filed a lawsuit under the Song-Beverly Consumer Warranty Act against Ford Motor Company (FMC) and Ford of Ventura. FMC moved to compel arbitration based on the arbitration provision in the sale contract between the petitioners and the non-party dealer.The trial court granted FMC's motion to compel arbitration, finding that FMC could enforce the arbitration provision as a third-party beneficiary of the sale contract and that the petitioners were estopped from refusing to arbitrate their claims. The petitioners moved for reconsideration twice, citing appellate decisions that disapproved of the precedent relied upon by the trial court. Both motions for reconsideration were denied, with the trial court maintaining its original order compelling arbitration.The California Court of Appeal, Second Appellate District, reviewed the case and concluded that FMC and Ford of Ventura are neither intended third-party beneficiaries of the sale contract nor entitled to enforce the arbitration provision under the doctrine of equitable estoppel. The court found that the sale contract did not express an intent to benefit FMC and that the petitioners' claims against FMC and Ford of Ventura were based on warranty obligations independent of the sale contract. The appellate court issued a writ of mandate directing the trial court to vacate its orders compelling arbitration and denying reconsideration, and to enter a new order denying FMC's motion to compel arbitration. View "Rivera v. Superior Court" on Justia Law

Trudy Maxwell, a 93-year-old resident of Atria Park of San Mateo, died after ingesting an industrial strength cleaner mistakenly served to her by an Atria employee. Trudy’s eight surviving children, including James Maxwell III (James III), filed a lawsuit against Atria Management Company and related entities, alleging negligence, wrongful death, and elder abuse. The trial court denied Atria’s motion to compel arbitration, concluding that James III, who signed the arbitration agreement, was not authorized to do so under his durable power of attorney (DPOA) because he was not authorized to make health care decisions for Trudy. Instead, Trudy’s daughter, Marybeth, held the power of attorney for health care.The Atria defendants appealed, arguing that James III had the authority to sign the arbitration agreement and that all of Trudy’s heirs were bound to arbitrate their wrongful death claims. They also contended that California’s Code of Civil Procedure section 1281.2(c), which allows an exception to arbitration when third-party claims may be affected, was preempted by the Federal Arbitration Act (FAA).The California Court of Appeal, First Appellate District, Division One, reversed the trial court’s order denying arbitration and remanded the case for further proceedings. The appellate court instructed the trial court to reconsider the validity of the arbitration agreement in light of the California Supreme Court’s recent decision in Harrod v. Country Oaks Partners, LLC, which held that agreeing to an optional arbitration agreement is not a health care decision. The appellate court also directed the trial court to determine whether the DPOA was valid and whether James III had the authority to agree to arbitration despite Marybeth holding the health care POA. Additionally, the court noted that the wrongful death claims of Trudy’s children were not subject to arbitration as they were not parties to the arbitration agreement. View "Maxwell v. Atria Management Co., LLC" on Justia Law

Sarah Anoke and other employees initiated arbitration proceedings against their employer, X (comprising Twitter, Inc., X Holdings I, Inc., X Holdings Corp., X Corp., and Elon Musk), for employment-related disputes. The arbitration provider issued an invoice for $27,200, which Anoke’s counsel mistakenly paid. The arbitration provider marked the invoice as paid and closed, then refunded the payment and issued a new invoice to X, which X paid within 30 days.Anoke petitioned the Superior Court of the City and County of San Francisco to compel X to pay her arbitration-related attorney fees and costs, arguing that X’s payment was untimely because it was not made within 30 days of the first invoice. The superior court denied the petition, reasoning that since the first invoice was nullified after Anoke’s attorney mistakenly paid it and X timely paid the second invoice, X met the statutory deadline.The California Court of Appeal, First Appellate District, reviewed the case. The court held that the statutory deadline for payment was tied to the due date set by the arbitration provider’s invoice. Since the first invoice was paid (albeit mistakenly) and the second invoice was paid within 30 days, there was no default. The court affirmed the superior court’s order, concluding that the arbitrator acted within its authority by issuing a second invoice and that the statute did not require the arbitrator to reinstate the first invoice after it had been paid and closed. The court also noted that the reasons for a timely payment are irrelevant under the statute. View "Anoke v. Twitter" on Justia Law

The case involves a dispute between Robert and Stephen Samuelian (the Samuelians) and Life Generations Healthcare, LLC (the Company), which they co-founded along with Thomas Olds, Jr. The Samuelians sold a portion of their interest in the Company, and the new operating agreement included a noncompetition provision. The Samuelians later challenged this provision in arbitration, arguing it was unenforceable under California law.The arbitrator found the noncompetition provision invalid per se under California Business and Professions Code section 16600, as it arose from the sale of a business interest. The arbitrator also ruled that the Samuelians did not owe fiduciary duties to the Company because they were members of a manager-managed limited liability company. The Company argued that the arbitrator had legally erred by applying the per se standard instead of the reasonableness standard. The trial court reviewed the arbitrator’s ruling de novo, found no error, and confirmed the award.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court held that the arbitrator had applied the wrong standard under section 16600. The court concluded that noncompetition agreements arising from the partial sale of a business interest should be evaluated under the reasonableness standard, not the per se standard. The court reasoned that a partial sale leaves the seller with some ongoing connection to the business, which could have procompetitive benefits. Therefore, such restraints require further scrutiny to determine their reasonableness.The court reversed the trial court’s judgment confirming the arbitration award and directed the trial court to enter an order denying the Samuelians’ petition to confirm the award and granting the Company’s motion to vacate the entire award, including the portion awarding attorney fees and costs. View "Samuelian v. Life Generations Healthcare, LLC" on Justia Law

Payam Mahram used Instacart to purchase groceries from a grocery store and later sued the store, alleging it had cheated him on price. The grocery store, not a party to the Instacart contract, moved to compel arbitration based on the arbitration agreement between Mahram and Instacart. The trial court denied the motion, and the grocery store appealed.The Los Angeles County Superior Court initially reviewed the case and denied the grocery store's motion to compel arbitration without providing a written explanation. The grocery store then appealed this decision to the California Court of Appeal, Second Appellate District.The California Court of Appeal affirmed the lower court's decision. The court held that while Mahram did agree to arbitration with Instacart by signing up for its service, the grocery store was not a third-party beneficiary of that agreement. The court determined that the trial court, rather than an arbitrator, was the proper authority to decide the threshold questions of arbitrability because the contract did not clearly indicate that Mahram had agreed to arbitrate with anyone other than Instacart. Additionally, the court found that the grocery store was not a third-party beneficiary of the Instacart-Mahram arbitration contract, as the contract's motivating purpose was not to benefit the grocery store. Consequently, the grocery store could not compel arbitration based on the Instacart agreement. The order denying the motion to compel arbitration was affirmed, and costs were awarded to the respondent. View "Mahram v. The Kroger Co." on Justia Law

The case involves a dispute over the enforceability of a noncompetition provision in an operating agreement following the partial sale of a business interest. Robert and Stephen Samuelian co-founded Life Generations Healthcare, LLC, and later sold a portion of their interest in the company. The new operating agreement included a noncompetition clause that the Samuelians later challenged in arbitration. The arbitrator found the provision invalid per se under California Business and Professions Code section 16600, which generally voids contracts restraining lawful professions, trades, or businesses.The Superior Court of Orange County reviewed the arbitrator's decision de novo and confirmed the award, agreeing that the noncompetition provision was invalid per se. The court also found that the Samuelians did not owe fiduciary duties to the company as minority members in a manager-managed LLC. The company and individual defendants appealed, arguing that the arbitrator applied the wrong legal standard and that the reasonableness standard should apply instead.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and concluded that the arbitrator had indeed applied the wrong standard. The court held that noncompetition agreements arising from the partial sale of a business interest should be evaluated under the reasonableness standard, not the per se standard. The court reasoned that partial sales differ significantly from the sale of an entire business interest, as the seller remains an owner and may still have some control over the company. Therefore, such noncompetition provisions must be scrutinized for their procompetitive benefits.The Court of Appeal reversed the trial court's judgment confirming the arbitration award and directed the trial court to enter an order denying the Samuelians' petition to confirm the award and granting the company's motion to vacate the entire award, including the portion awarding attorney fees and costs. View "Samuelian v. Life Generations Healthcare, LLC" on Justia Law

In 2020, several residents at a skilled nursing facility died from coronavirus infections. Family members of the deceased sued the facility and its alleged alter egos, asserting claims including elder abuse, negligence, and wrongful death. The defendants moved to compel arbitration based on agreements signed by family members rather than the decedents. The trial court denied the motion, finding no evidence that the family members had authority to sign on behalf of the decedents, and that the agreements did not bind the family members in their individual capacities. For one agreement where a family member had power of attorney, the court exercised its discretion to deny arbitration to avoid conflicting results.The Shasta County Superior Court denied the motion to compel arbitration. It found that the defendants did not provide evidence that the family members had authority to sign the arbitration agreements on behalf of the decedents. Additionally, the court ruled that the agreements did not bind the family members in their individual capacities. For the agreement involving a power of attorney, the court denied arbitration to prevent conflicting rulings between court and arbitration proceedings.The California Court of Appeal, Third Appellate District, reviewed the case. It affirmed the lower court's decision, holding that the defendants failed to establish that the family members were authorized agents of the decedents. The court also found that the family members did not sign the agreements in their individual capacities, and thus were not bound by them. Furthermore, the court upheld the trial court's discretion to deny arbitration for the claim involving a power of attorney to avoid conflicting rulings. The order denying the motion to compel arbitration was affirmed. View "Hearden v. Windsor Redding Care Center" on Justia Law

This case involves a dispute over an arbitration award in a real estate transaction. The plaintiffs, Miguel and Lizette Valencia, purchased a home from the defendants, Armando Mendoza, Coastal Holdings, LLC, and Class A Realty, Inc. After discovering undisclosed defects in the home, the Valencias initiated an arbitration proceeding against the defendants. The arbitrator ruled in favor of the Valencias, awarding them damages for repairs, loss of use, statutory penalties, and inspection fees, as well as punitive damages and attorneys' fees.The defendants appealed the arbitration award to the Superior Court of Los Angeles County, arguing that the court erred in denying their petition to vacate the arbitration award and in confirming the Valencias' petition to confirm the award. The defendants also contended that the arbitrator committed legal error by excluding key evidence from the arbitration hearing. The trial court affirmed the arbitration award, finding that the defendants' petition to vacate the award was untimely and that they failed to show that the arbitrator erred in its rulings excluding evidence.On appeal to the Court of Appeal of the State of California, Second Appellate District, Division Seven, the defendants argued that the trial court erred in not considering the evidence they submitted with their late-filed petition to vacate the arbitration award. The appellate court affirmed the trial court's decision, holding that the defendants failed to meet their burden of establishing the existence of error in the arbitration award. The court also found that the trial court did not abuse its discretion in confirming the award without considering the defendants' untimely evidence. View "Valencia v. Mendoza" on Justia Law